Demolition costing

Demolition costing

An integral part of any facility closure is estimating the cost of removing the mine infrastructure that cannot be used for other purposes. This cost, while considerable, usually forms a smaller portion of the total closure liability.

The approach taken in assessing demolition costs depends on the level of information available.  New mines can usually provide drawings and schedules of quantities for the infrastructure, whereas older mines, at best, only retain surface layout plans. The less information available, the longer the time required to quantify the extent and type of infrastructure at the mine.

SRK has developed an estimating tool that uses typical contractor labor and plant rates to assess the demolition liability, and to update this cost by inserting the latest rates applicable at any later date.

The actual demolition cost will obviously be sensitive to the resale value of the plant and the value of the scrap material at that particular time. As this is uncertain, any benefit from this source is normally excluded from the cost estimate; however, the estimating system can provide a scrap recovery cost, based on current scrap prices.

It is possible to link the demolition costs to a client’s asset register and to a GIS information system, if available, that shows the costs associated with closing a particular aspect of a mine.

Jan Slabbert: jslabbert@srk.co.za



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